Definition
Moratorium Period
The moratorium period in health insurance is the span of continuous coverage after which an insurer cannot challenge a claim on grounds of non-disclosure or misrepresentation, except for proven fraud.
IRDAI rules provide that once a health policy has run continuously for the prescribed period (recently reduced to give policyholders earlier protection), the insurer loses the right to repudiate claims for non-disclosure of pre-existing conditions or misstatements, barring established fraud.
The moratorium gives long-tenured policyholders certainty that their cover will respond, an important safeguard against insurers questioning old disclosures at claim time. It is one reason continuity of cover and timely renewals matter, since the clock runs on uninterrupted coverage.
Related terms
- Pre-Existing Disease (PED)A pre-existing disease is any condition, ailment or injury diagnosed or treated before buying a health policy, typically subject to a waiting period.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.